Resilience of Island businesses is praised

But the chamber has warned of a potential increase in unemployment as support for the furloughing of staff begins to be phased out.

It said that the more communities do to support local businesses “the greater the chances we have of reducing these impacts”.

The comments came in response to the findings of a survey of more than a thousand businesses across the Highlands and Islands which showed a marked decline in local confidence in Scotland’s economic outlook, according to commissioners, HIE, but the business development agency did welcome “the continued belief” amongst firms in their own future, shown in the survey.

IMPACTS AND RESPONSES TO PANDEMIC

The survey, which was conducted in June, focussed on the impacts and responses of local businesses to the pandemic.

It showed that 79 per-cent of respondents reported a decline in their confidence in the outlook for Scotland’s economy in the past six months, the largest fall in business confidence registered by HIE in its surveys since 2014.

Disruption to trade, decline in sales, loss of income, and the furloughing of employees were reported as some of the main impacts of COVID-19, with 85 per-cent of business reporting that they had seen a decline in sales – or no sales at all – in the period and just four per-cent reporting an in crease in trade.

Nearly half of the businesses who responded to the survey had been able to continue operating throughout the lock-down and a further 12 per-cent had reopened after closing initially.

More than two-thirds had applied for support and 91 per-cent of those had received assistance.

Most businesses (71 per-cent) told the survey they were confident they could access the financial resources they need to get through the crisis and 87 per-cent were confident they’d be able to adhere to government guidelines when emerging from lock-down.

But, despite the impacts of the pandemic, three quarters of firms said they believed their businesses will still be viable in six months time.

The main concerns expressed by businesses for the next six months were an economic downturn, future waves of coronavirus and lockdown, and sustainability of the business.

WELCOME FIRMS’ CONFIDENCE IN THE FUTURE

Lynne MacIver, Chief Executive of OHCC, said: “As the survey results confirm, the majority of businesses have been impacted by the corona-virus lockdown and restrictions currently in place.

“Businesses across the Outer Hebrides have shown resilience and flexibility in responding quickly and making changes that have allowed some businesses to continue operating throughout.

“We still have a long road ahead and with the imminent phasing out of furlough for staff, we may see increases in local unemployment.

“However, the more we do as a community to support local businesses, the greater the chances we have of reducing these impacts.”

Charlotte Wright, chief executive of HIE, said: “As expected, the survey shows there have been many severe impacts across the Highlands and Islands and the road to recovery is a long one.

“In that context, the high success rate among those who applied for government support is encouraging, and suggests the additional funding is being targeted effectively and making a real difference.

“We particularly welcome the confidence that many firms have in their own future and that they expect to have the resources they need to get through the crisis.

“This is typical of the prevailing can-do optimistic attitude of so many in the region; qualities that will be vital in rebuilding the economy.”